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Lacy graduated from college with $37,500 in student loans and is looking to refinance. The current interest rate is 4% for a 10 year loan or 6% for a 20 year loan.

Loan A (10 years) results in monthly payments of $379.67.

Loan B (20 years) results in monthly payments of $268.66.

What would be his total payback amount for each loan?

1 Answer

3 votes

Answer:

  • Loan A = $45560.40
  • Loan B = $64 478.40

Explanation:

Loan A

  • 10 years = 120 months

Total payment

  • $379.67*120 = $45560.4

Loan B

  • 20 years = 240 months

Total payment:

  • $268.66*240 = $64 478.4
User Roy Levy
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